Donald Trump may not be president yet, but the U.S. is already taking a more aggressive line on trade issues.
The U.S. Trade Representative today announced plans to make a World Trade Organzation (WTO) challenge to B.C.’s policy of only carrying local wines on grocery store shelves.
Last year, the province opened up wine sales to select grocery retailers, provided they stock 100% B.C. grown VQA wine.
Now, the U.S. is firing back, arguing the move amounts to discrimination by WTO rules by denying U.S. winemakers access to shelves, which it calls “a new and growing retail channel.”
American trade representatives will now attempt to resolve the issue through consultation with Canada; if that fails, it would go to a WTO dispute resolution panel.
The U.S. has launched 26 disputes through the WTO, and won all of them.
But the province says it’s on solid ground and complying with Canada’s international trade obligations.
In a statement, Jobs and Tourism minister Shirley Bond says its new liquor strategy is covered under existing trade rules.
“Trade agreements such as NAFTA allow for a number of private wine outlets that sell only B.C. wine, and we are confident in the approach we have taken.”
Bond says the province plans to fight the challenge, and will be working with Global Affairs Canada through the upcoming consultation process.
Foreign wines are permitted for sale at other B.C. grocery stores which use the province’s separate “store within a store” model.
Under that structure, a separate, “mini liquor store” is permitted within the walls of an existing grocery store.
Meanwhile, Tom LaFaille with the International Trade Council for the Wine Institute of California says B.C.’s regulations are ‘harmful’ to wines producers throughout the world.
He says the U.S. has a good chance of winning the case.
“We feel we’ve got a very strong case, there’s precedent in other countries under WTO law that basic principles of international trade require reasonable and fair access to the same type of system that’s set up in terms of retail distribution.”
LaFaille says several states are concerned over the province’s regulations, particularly Washington, Oregon and California.